Precedents are being set in Europe as the Troika ignore their own rules once again. A new deal has been banded togeather to bail out the recalcitrant Cyprus which breaks foundation rules regarding deposits and bonds. Why do we care?

This undermines faith in the institutions designated to give just that! The adhoc and previously illegal actions of the ECB, have undermined faith in the concept. Currency unity is a completely stupid idea without fiscal union and who would trust the EU to run policy?

The EUR took a hammering after initial confidence slipped. The single currency dropped back to 1.2850 as the GBP treads water at 1.5150. The sitiuation in Europe has highlighted the vulnerability of the single market and the associated currency.

Higher yielding commodity currencies have survived the hit to market confidence with the AUD trading 1.0450 and the KIWI 0.8350. Analysis will reveal the parlous state of Europe and the impact on markets who also need a long hard look in the mirror!

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